Explanation:

A Horizontal Marketing system is a form of distribution channel wherein two or more companies at the same level unrelated to each other come together to gain the economies of scale.
In other words, Horizontal marketing system is the merger of two unrelated companies who have come together to exploit the market opportunities.

Generally, this type of marketing system is followed by companies who lack in capital, human resources, production techniques, marketing programs and are afraid of incurring the huge losses. In order to overcome these limitations, the companies join hands with other companies who are big in size either in the form of joint venture –that can be temporary or permanent, or mergers to sustain in the business.